£300 per month only income - tax help
Discussion
First of all, I would check that the status really is "self employed".
How many clients does she have?
How does she control and manage the work?
Is she legally liable for the work she does?
Does she need to take out her own professional insurance?
On the assumption that she can properly establish (if challenged) that she really is "in business on her own account", then she needs to notify HMRC that she now has income that needs to be returned under the Self Assessment tax system. HMRC will issue her with a notice to complete a Self Assessment tax return in due course (sometime after 5 April 2015). They will also issue her with a Self Assessment Tax Reference (usually referred to as a UTR number)
She will also need to register for Self Employed Class 2 NI. Because of the low level of income, she will be able to apply to defer payment of the Class 2 NI.
If her only income in the tax year is from this self employed activity, it is highly unlikely that she will have any tax or Class NI to pay. However, she will still need to make the return and, of course, if she is successful and picks up more clients, she may very well be in the taxable brackets before too long.
How many clients does she have?
How does she control and manage the work?
Is she legally liable for the work she does?
Does she need to take out her own professional insurance?
On the assumption that she can properly establish (if challenged) that she really is "in business on her own account", then she needs to notify HMRC that she now has income that needs to be returned under the Self Assessment tax system. HMRC will issue her with a notice to complete a Self Assessment tax return in due course (sometime after 5 April 2015). They will also issue her with a Self Assessment Tax Reference (usually referred to as a UTR number)
She will also need to register for Self Employed Class 2 NI. Because of the low level of income, she will be able to apply to defer payment of the Class 2 NI.
If her only income in the tax year is from this self employed activity, it is highly unlikely that she will have any tax or Class NI to pay. However, she will still need to make the return and, of course, if she is successful and picks up more clients, she may very well be in the taxable brackets before too long.
IR35 does not apply to "Self Employed" individuals. It is misleading to post a link to an area of HMRC legislation which does not apply to the OP's question.
IF the OP's missus did decide to set up as a limited company, THEN IR35 might be a relevant issue. But with turnover limited to £3,600 per annum, a limited company set-up would be overkill.
IF the OP's missus did decide to set up as a limited company, THEN IR35 might be a relevant issue. But with turnover limited to £3,600 per annum, a limited company set-up would be overkill.
Eric Mc said:
IR35 does not apply to "Self Employed" individuals. It is misleading to post a link to an area of HMRC legislation which does not apply to the OP's question.
IF the OP's missus did decide to set up as a limited company, THEN IR35 might be a relevant issue. But with turnover limited to £3,600 per annum, a limited company set-up would be overkill.
Although I'd assume that the HMRC tests of disguised employee vs being in business would be applicable. IF the OP's missus did decide to set up as a limited company, THEN IR35 might be a relevant issue. But with turnover limited to £3,600 per annum, a limited company set-up would be overkill.
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